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The maximum amount to be paid to the employee is currently 20 lakhs or increased to 25 lakhs. Secondly, is it legally binding to pay the amount the ceiling amount fixed in the Gratuity Act, that is, if it's more than 20 lakhs?
From India, Bengaluru

Hi, Gratuity amount paid up to Rs.20 Lakhs will be free from income tax ( tax exemption applicable). Any amount paid over and above Rs.20 Lakhs will be subject to tax. Please note that there is no statutory obligation on the part of the employer to make payment beyond 20 Lakhs but employer at their own discretion can make payment beyond Rs.20 Lakhs but tax to be deducted based on the tax slab of the employee.
From India, Madras
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